Tax hike could make for tough vote for some on Metro Council

Darren Jernigan, a popular Old Hickory-area Metro Councilman, is campaigning to turn a once solidly blue state legislative seat back to the Democratic column as he challenges Republican Rep. Jim Gotto for state House District 60.

But before the two men clash in November’s election Jernigan must weigh in on Mayor Karl Dean’s property tax increase proposal, a 53-cent hike to the city’s $4.13 tax rate — an overall 12.83 percent bump — which the mayor introduced last week. That puts the second-term councilman in a difficult spot.

On one hand, Jernigan has proven to be a friend of Dean on the council, especially when it came to his vote to approve public financing for the mayor’s Music City Center. But a Democrat signing off on a tax hike would serve up red meat to his conservative opponent. It’s easy to visualize such a vote as the centerpiece of future campaign mail and other attack material.

“I haven’t made my mind up,” Jernigan said, adding that he’s looking at some issues specific to the General Services District, which includes areas in the county’s periphery, like Old Hickory, which actually has a slightly lower property tax rate than the city’s urban core.

Jernigan also wants to pore over Dean’s forthcoming capital spending plan, a $300 million list of infrastructure spending that will be finalized in May to accompany Dean’s proposed $1.71 billion operating budget. Said Jernigan, “If you’re going to ask to raise taxes, people are going to want to see a little something in their area.”

Of the 40 members who make up the Metro Council, only five have ever voted on an adjustment to the city’s tax rate. For the remaining 35, the mayor’s pitch to raise Metro’s property taxes for the first time since 2005 represents new territory. And it is especially uncomfortable terrain for Jernigan and two other colleagues: Councilmen Jason Potts and Bo Mitchell, who like Jernigan, are running as Democrats in the far-right-leaning Tennessee state legislature. Mitchell is going after the open House District 50 seat held by retiring Democrat Gary Moore.

“I’m trying to reserve any comment on that,” Mitchell said when asked how he would vote. “I want to get the budget book, look through it and do a little bit more research. I’m not going to spout off either way right now.”

Mitchell added that many in his Bellevue district are still recovering from the city’s devastating flood two years ago, and suggested higher taxes could hurt: “You’ve got a lot of people who were underwater literally, and now financially they’re underwater.”

Dean might not get the votes of Jernigan, Mitchell and Potts — and he might understand their political dilemma — but the mayor is expected to have the majority of council members on his side as he makes the case that added tax revenue is essential to “continue our forward momentum.”

Outside the situation of that trio, Dean’s tax hike proposal could very well split the council into familiar factions: those who have signed off on the mayor’s initiatives in the past, numbering around 20, and those who haven’t, a much smaller crew composed mostly of conservatives.

Politically, the key to a smooth council victory is winning the so-called “undecideds” in the middle. A final council vote on raising property taxes should come in June.

“It’s kind of a crossroads decision,” Dean told City Paper reporters as he made the rounds to the newspaper’s office to discuss his proposal last week. “And to me, the choice is just so stark.”

Dean, as articulated in his State of Metro address, has framed a tax increase as the more desirable of two choices. Not increasing tax revenue at this time, after years of government belt-tightening during the Great Recession, would lead to “draconian cuts,” he said: laying off 200 police officers and 200 teachers, closing four community centers and shuttering five libraries. But pumping an extra $100 million into Metro’s coffers — the estimated jolt of the property tax hike — would allow the city to set itself right for “decades to come,” he maintained.

The mayor has proposed increasing the starting salaries of teachers from $35,000 to $40,000, retaining 50 cops originally hired from a now-expiring federal grant, and funding one of the most robust capital-spending sprees in more than a decade: the paving of long-neglected roads and sidewalks; the construction and renovation of a host of school buildings; a new bus rapid transit “lite” line along Murfreesboro Pike; and expanded brush pickup services, among several other investments.

“Do we continue to invest in these critical areas?” Dean posed in explaining the tax issue. “Or do we risk falling backward? Do we risk derailing our city from its path to greatness?”

Dean’s allies on the council have already started to run with that theme.

Minutes after Dean unveiled his tax increase proposal Tuesday in sweltering temperatures at the newly opened Cumberland Park, At-large Councilman Jerry Maynard said, “Not only am I going to support it,” but also urged his colleagues to have an “open mind” about increasing the rate further.

“If there’s still cuts that impact our community, we may need to look at adjusting it even more, so that we make sure no area of our government, no citizen has to suffer as a result of our past cuts over the last four years,” he said.

Council budget and finance chairman Sean McGuire said, “The mayor makes an extremely good case that we do have a choice to make.” He echoed Dean’s framing of the issue: “Either we keep moving forward as a city or we regress.”

Conservative council members were predictably less enthused. Councilman Tony Tenpenny said a tax increase is “something [the council] should really take a look at first” before approving. “Until that happens, I’m not in favor of a tax hike. I’m just not.”

Dean, however, will likely be able to get by without the support of Tenpenny and other conservatives like Councilman Robert Duvall. Instead, compiling a solid majority to support his tax plan puts a greater spotlight on council members like Emily Evans and Jason Holleman, who have criticized pieces of Dean’s policy agenda over the past four-plus years.

“I think we all have a duty to go through the budget process and review the mayor’s proposal as well as the viable alternatives,” Holleman said.

“We have to look at where the money will go, and what cuts would have to be made if we don’t increase our revenues,” he added. “Obviously, we have an obligation to provide adequate city services to citizens, as well as an obligation to try to keep the tax rate as low as possible.”

A major hurdle for the mayor will be eliminating a public perception that the city’s new $585 million Music City Center — his signature project — is somehow connected to the tax increase. In his State of Metro address, Dean stressed that tourist-targeted hotel tax revenue, which isn’t tied to Metro’s operating budget, is bankrolling the still-under-construction convention center.

Also key to Dean’s effort will be to quell, or at least minimize, any loud uprising from the council’s right, a voice that could be amplified by the likes of the Nashville Tea Party, led by anti-tax advocate Ben Cunningham (who as his critics like to point out, actually lives in Sumner County).

Following the mayor’s announcement, Cunningham told The City Paper that phone calls blasting Dean’s proposal were virtually nonstop. “It’s going to make Davidson County even less competitive with the surrounding counties,” he said of the mayor’s tax hike. After property values are reappraised next year, he expects the tax rate to automatically rise again. “It’s going to put even more pressure in the future for even more tax increases.”

Cunningham said his Tea Party troops would fight Dean’s tax proposal vigorously and hinted at “organization and activity announcements” coming this week.

In the end, though, Nashville mayors have historically gotten their property tax increases, though not necessarily as large as they originally sought. Dean’s two predecessors, Bill Purcell and Phil Bredesen, each raised property taxes twice.

By going an entire term without raising taxes, Dean was unique. But it came with a cost: 688 fewer employees than when he arrived at the mayor’s office and an operating budget that decreased by $59.2 million.

“After four years, there is little fat left,” Dean said. “To make signification budget reductions this year would mean cutting into muscle.”

7 Comments on this post:

By:Ask01 on 5/7/12 at 4:51

I saw my representatives name listed.

The councilman should realize he was elected partially because his predecessor supported the MCC and we voters booted him.

If the councilman desires any continued political support, he should do the right thing, and force Mayor Dean to find the cuts elsewhere than critical services, or taxes somewhere else besides property owners.

By:Rasputin72 on 5/7/12 at 8:03

Having been an officer in a Fortune 500 company and a entrepreneur with lots of employees and lots of expenses to go along with a very competitive market I say unto the populous/

You do not have to be very smart to balance a budget when all you have to do is raise the revenue. The brainy part comes from balancing the budget when you are unable to raise the revenue/

In the case of Karl Dean he is taking the easy route to balancing the budget. One that requires not much intelligence.

By:JudgeRoyBean on 5/7/12 at 10:20

I am obviously not an expert on city finances but I do have some concerns about this request for a tax increase. I'm hoping someone can shed some light on this for me. We have financed (and are financing) a number of projects (Titans, Predators, convention center) . Not to mention tax breaks for a number of businesses. As for the convention center, Mayor Dean says no property tax money was, or will be used for that. I assume though, that the financial benefits will be used to repay the debt incurred in building it. If I understand correctly, tax revenue in a certain area around the convention center will also be used to pay the debt.

If so, then what is the benefit to the taxpayer? It seems to me that to benefit from these projects then, as a taxpayer, I should get the same services for less money, or better services for the same money. But instead of realizing a benefit, I'm being asked to pay more for what I think should be basic municipal expenses. My son graduated from Stratford in 1997. The school needed repairs then. My point is that some of these problems have been with Mayor Dean from the beginning of his first term, but they haven't been addressed.

So what do you think? Am I wrong in thinking that the benefits from some of these large projects are non-existent, and that we are now being asked to make up the difference?

By:ladyday1 on 5/7/12 at 3:18

Mayor Dean is using scare tactics to gain an end!! He will take away 200 police officers, 200 teachers,close four community centers, shuttering five libraries and etc.
Rasputin 72 was so right when he said," You do not have to be smart to balance a budget when all you have to do is raise the revenue". Property owners are sitting ducks!
Karl Dean should clean house with the department heads and boards that he has appointed. They get caught taking favors and spending tax payer money for personal gain. Rather than a reprimand they get a big pay raise or free stuff.
Also when he gives hugh tax breaks to Companies who want it, why then does the average Property owner not feel like the scape goat.

By:Shadow63 on 5/7/12 at 6:20

Do not support anyone who supports raising residential property tax. Let you councilman know how you feel.

By:govskeptic on 5/8/12 at 7:06

A few Council members seeking a different job after their council terms
have ended certainly don't make for a majority opposing this tax increase.
In fact, most of those opposing because their constituents oppose the
increase, are listening or pretending to for the very first time. Those like
Jernigan, and there are several, certainly wasn't listening when the
heavy spending was being voted on. Skip the promises for the future
and look to their past for the truer self!

By:JayBee56 on 5/8/12 at 8:32

JudgeRoyBean, you are exactly right. All the revenue being brought in by these for profit businesses should make the tax burden lighter on non profit residents. But the reality is the opposite. These mythical jobs that are touted are potential. And the city becomes obligated with actual money for jobs that are potential and may or may not materialize or will not be what they were first thought. Meanwhile the taxpayer has nothing to bargain with. With apologies to all red headed stepchildren, the citizen taxpayer is treated like one - an inconvenience instead of a constituent and stakeholder in the county. Just think - if it wasn't for those bothersome citizens and voters, they could turn Nashville into a business and entertainment mecca!